Studio pays $21 million in stock for site

Lionsgate has acquired a significant stake in entertainment website Break.com in a move that will give the studio an additional online outlet for its film and TV content.

Financial terms of the investment were not officially disclosed, but sources familiar with the deal said Lionsgate ponied up $21 million in stock for a 42% stake in Break.com.

Break.com has proved popular among content creators and advertisers for the more than 17 million monthly unique visitors — mainly men 18-34 — the site has been able to reach with its edgy shortform original and user-generated content.

“We first interacted with Break as an advertiser, and we had impressive success there,” said Lionsgate vice chairman Michael Burns. Studio promoted “The Condemned,” “Bug” and “Delta Farce” on the site.

“We came to recognize them as a premier platform for integrating content and advertising as well as the leading online site serving the young male demographic,” Burns said.

Lionsgate plans to continue to use the site as a promotional and distribution platform for its film, TV and homevid releases. Studio also is looking to use the site as a tool to identify talent with which it can broker development deals.

Lionsgate already distributes its content via Apple’s iTunes, Amazon Unbox and Microsoft’s Xbox Live. It launched FearNet.com in October with Sony and Comcast.

It also owns a 20% stake in online movie download site CinemaNow and will continue to digitally distribute its library of content on the service.

Content deal with Lionsgate is the latest for Break.com as the company plans to start offering up more premium fare to its viewership.

In May, it brokered a deal with “Saw” producer Twisted Pictures to exclusively distrib an original movie, broken up into three-minute segments. It also has original programming deals with NBC Digital Studios and Endemol for Web series.

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